- Caught badly wrong footed by the move to flexible CNY yesterday. Substantial part of my Risk Off bets unfortunately in short Copper and AUD, both higher China beta relative to CAD. Licking my wounds here.
- Reduced positions. Watching to see if the CNY reval is going to overwhelm other negatives eg Europe debt. My guess is the former's impact will fade soon (interbank trading higher than yesterday).
- Price action (eg see charts) suggests daily reversals in the making. Possible that the CNY news = that's it for the Risk On trade. Not holding my breath though.
- Need a close in, say, weekly AUD/USD below 0.8576 to put market back in Risk Off mode.
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